Estate Tax Planning - Instrumental Protocols For Families

When planning your estate, taxes are one of the most important considerations. After all, you want your family to pay very little in taxes after you pass on. Here are a few tax planning tips to be aware of.

Transfer Money as Gifts 

If you want your estate to be subject to fewer estate taxes, one of the most rewarding things you can do is gift your children money. You can gift up to a certain amount without your children having to pay taxes. The limit varies from state to state. 

Money as gifts is a great idea, especially if you want to help your loved ones pay for significant financial events. For instance, you can gift them money to pay for college, a down payment for a house, or a better vehicle. 

Give to Charity 

If you don't plan to gift your children money because they're already taken care of financially, you can still lower your family's estate taxes by giving money to charity. Any amount you donate is claimable as a deduction. 

In addition to lowering your estate taxes, you'll help people in need and feel good about the impact you have even after you pass on. Just make sure to document these donations so that family members don't struggle to claim deductions when the time comes. 

Start Saving Early 

Even if you gift money to children and donate to charity, there still might be estate taxes that your family is obligated to pay after you pass on. That's okay if you start saving for these taxes early.

For instance, you can start a savings account and put money towards estate taxes every month. When your estate comes into play after you pass on, there will already be money to pay every tax bill. 

Hire an Estate Planning Attorney

After you come up with solid plans for how your family will take care of estate taxes, speak with an estate planning attorney. 

They'll verify that your financial plans are sound, as well as provide additional advice to improve how your family handles estate taxes when they become relevant. Additionally, your attorney knows estate tax laws in your area, which is instrumental for doing things by the book. 

Estate planning involves impactful matters, with taxes near the top of the list. If you put together concrete plans that make sense for your financial situation and assets, you can live out the rest of your years knowing estate taxes won't financially ruin surviving family members. 

For more information, contact a law firm such as Walser Law Firm.